FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of November 2004
TOWER SEMICONDUCTOR LTD.
(Translation of registrant's name into English)
P.O. BOX 619, MIGDAL HAEMEK, ISRAEL 23105
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
The Registrant will hold its Annual and Special General Meeting of
Shareholders on December 5, 2004 at 11:00 a.m. (Israel time) at the Registrant's
offices in Migdal Haemek, Israel. In connection with the meeting, on or about
November 10, 2004, the Registrant mailed to shareholders (i) a Notice of Annual
and Special General Meeting and Proxy Statement and (ii) a Proxy Card. Attached
hereto as Exhibits 99.1 and 99.2 are, respectively, the Notice of Annual and
Special General Meeting and Proxy Statement and Proxy Card.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TOWER SEMICONDUCTOR LTD.
Date: November 10, 2004 By: /S/ Tamar Cohen
-------------------
Tamar Cohen
Corporate Secretary
EXHIBIT 99.1
TOWER SEMICONDUCTOR LTD.
NOTICE OF ANNUAL AND SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 5, 2004
Notice is hereby given that the Annual and Special General Meeting (the
"Meeting") of the shareholders of Tower Semiconductor Ltd. ("Tower" or the
"Company"), an Israeli company, will be held at the offices of the Company,
Hamada Avenue, Ramat Gavriel Industrial Park, Migdal Haemek, Israel, on Sunday,
December 5, 2004, at 11:00 a.m. (Israel time) for the following purposes:
1. To elect six members to the Board of Directors of the Company for the
coming year.
2. To appoint a Chairman of the Board of Directors.
3. To approve the appointment of Brightman Almagor & Co. (a member of Deloitte
Touche Tohmatsu International) as the independent public accountant of the
Company for the year ending December 31, 2004 and for the period commencing
January 1, 2005 and until the next annual shareholders meeting, and to
further authorize the Audit Committee of the Board of Directors to fix the
remuneration of such auditors.
4. To extend the appointment of Mr. Hans Rohrer to an additional three-year
term as an Outside and Independent Director.
5. To appoint Ms. Tal Yaron-Eldar to a three-year term as an Outside and
Independent Director.
6. To approve an increase in the number of the Company's authorized ordinary
shares to 250,000,000 and authorized share capital to NIS 250,000,000 and
to amend the Articles of Association to reflect such increase.
7. To approve the modification of the Non-Employee Director Share Option Plan
2001.
8. To approve the designation of up to 210,000 options under the Employee
Share Option Plan 2005 as incentive stock options.
9. To receive management's report on the business of the Company for the year
ended December 31, 2003, and to transact such other business as may
properly come before the Meeting.
Shareholders of record at the close of business on November 10, 2004, are
entitled to notice of, and to vote at the Meeting. All shareholders are
cordially invited to attend the Meeting in person.
Shareholders who do not expect to attend the Meeting in person are
requested to mark, date, sign and mail the enclosed proxy as promptly as
possible in the enclosed stamped envelope. Beneficial owners who hold their
shares through members of the Tel Aviv Stock Exchange ("TASE") may either vote
their shares in person at the Meeting by presenting a certificate signed by a
member of the TASE which complies with the Israel Companies Regulations (Proof
of Ownership for Voting in General Meetings)-2000 as proof of ownership of the
shares, or send such certificate along with a duly executed proxy to the Company
at Hamada Avenue, Ramat Gavriel Industrial Park, Post Office Box 619, Migdal
Haemek 23105, Israel, Attention: Corporate Secretary.
By Order of the Board of Directors,
CARMEL VERNIA
Chairman of the Board and CEO
November 10, 2004
PROXY STATEMENT
TOWER SEMICONDUCTOR LTD.
HAMADA AVENUE, RAMAT GAVRIEL INDUSTRIAL PARK
P.O. BOX 619
MIGDAL HAEMEK 23105, ISRAEL
ANNUAL AND SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 5, 2004
The enclosed proxy is being solicited by the board of directors (the "Board
of Directors") of Tower Semiconductor Ltd. (the "Company" or "Tower") for use at
our Annual and Special General Meeting of Shareholders (the "Meeting") to be
held on December 5, 2004, or at any adjournment thereof. The record date for
determining shareholders entitled to notice of, and to vote at, the Meeting is
established as of the close of business on November 10, 2004. On that date, we
had outstanding and entitled to vote 65,699,796 of our ordinary shares, par
value New Israeli Shekels ("NIS") 1.00 (the "Ordinary Shares").
The proxy solicited hereby may be revoked at any time prior to its exercise
by means of a written notice delivered to us, by substitution of a new proxy
bearing a later date or by a request for the return of the proxy at the Meeting.
We expect to solicit proxies by mail and to mail this proxy statement and the
accompanying proxy card to shareholders on or about November 10, 2004. We will
bear the cost of the preparation and mailing of these proxy materials and the
solicitation of proxies. We will, upon request, reimburse banks, brokerage
houses, other institutions, nominees, and fiduciaries for their reasonable
expenses in forwarding solicitation materials to beneficial owners.
Upon the receipt of a properly executed proxy in the form enclosed, the
persons named as proxies therein will vote the Ordinary Shares covered thereby
in accordance with the instructions of the shareholder executing the proxy. With
respect to the proposals set forth in the accompanying Notice of Meeting, a
shareholder may vote in favor of any of the proposals or against any of the
proposals or may abstain from voting on any of the proposals. Shareholders
should specify their choices on the accompanying proxy card. If no specific
instructions are given with respect to the matters to be acted upon, the shares
represented by a signed proxy will be voted FOR the proposals set forth in the
accompanying Notice of Meeting. We are not aware of any other matters to be
presented at the Meeting.
Any shareholder returning the accompanying proxy may revoke such proxy at
any time prior to its exercise by (i) giving written notice to us of such
revocation, (ii) voting in person at the Meeting or requesting the return of the
proxy at the Meeting or (iii) executing and delivering to us a later-dated
proxy. Written revocations and later-dated proxies should be sent to: Corporate
Secretary, Tower Semiconductor Ltd., Hamada Avenue, Ramat Gavriel Industrial
Park, Post Office Box 619, Migdal Haemek 23105, Israel.
Each Ordinary Share is entitled to one vote on each matter to be voted on
at the Meeting. Subject to the terms of applicable law, two or more shareholders
present, personally or by proxy, who hold or represent together at least 33% of
the voting rights of our issued share capital will constitute a quorum for the
Meeting. If within half an hour from the time appointed for the Meeting a quorum
is not present, the Meeting shall stand adjourned for one week, to December 12,
2004 at the same hour and place, without it being necessary to notify the
shareholders. If a quorum is not present at the adjourned date of the Meeting
within half an hour of the time fixed for the commencement thereof, subject to
the terms of applicable law, the persons present shall constitute a quorum.
Each of Proposals 1, 2, 3, 6 and 8 to be presented at the Meeting requires
the affirmative vote of shareholders present in person or by proxy and holding
Ordinary Shares amounting in the aggregate to at least a majority of the votes
actually cast with respect to each such proposal. Each of Proposals 4 and 5 to
be presented at the Meeting requires the affirmative vote of shareholders
present in person or by proxy and holding Ordinary Shares amounting in the
aggregate to: (i) the majority of votes cast at the Meeting, including at least
one third of all votes of the non-controlling shareholders who are present in
person or by proxy and vote on the proposal or (ii) the majority of votes cast
on the proposal at the Meeting, provided that the total votes cast in opposition
to the proposal by the non-controlling shareholders does not exceed 1% of all
the voting rights in the Company. Proposal 7 to be presented at the Meeting may
require the affirmative vote of shareholders present in person or by proxy and
holding Ordinary Shares amounting in the aggregate to at least: (i) the majority
of the votes actually cast with respect to such proposal including at least
one-third of the voting power of the disinterested shareholders who are present
in person or by proxy and vote on such proposal, or (ii) the majority of the
votes actually cast with respect to such proposal at the Meeting, provided that
the total votes cast in opposition to such proposal by the disinterested
shareholders does not exceed 1% of all the voting power in the Company.
SHAREHOLDERS ARE REQUESTED TO NOTIFY US WHETHER OR NOT THEY HAVE A PERSONAL
INTEREST IN CONNECTION WITH PROPOSAL 7. (PLEASE SEE THE DEFINITION OF THE TERM
"PERSONAL INTEREST" BELOW.) IF ANY SHAREHOLDER CASTING A VOTE IN CONNECTION
HERETO DOES NOT NOTIFY US WHETHER OR NOT THEY HAVE A PERSONAL INTEREST WITH
RESPECT TO PROPOSAL 7, THEIR VOTE WITH RESPECT TO SUCH PROPOSAL WILL BE
DISQUALIFIED.
2
PRINCIPAL SHAREHOLDERS
The following table and notes thereto set forth information, as of October
31, 2004, concerning the beneficial ownership (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended), and on a diluted basis, of
Ordinary Shares by any person who is known to own at least 5% of our Ordinary
Shares. On such date, 65,699,796 Ordinary Shares were issued and outstanding.
The voting rights of our major shareholders do not differ from the voting rights
of other holders of our Ordinary Shares. However, certain of our shareholders
have entered into a shareholders agreement pursuant to which they may be able to
exercise control over matters requiring shareholder approval, including the
election of directors and approval of significant corporate transactions.
PERCENT OF CLASS
IDENTITY OF PERSON OR GROUP AMOUNT OWNED PERCENT OF CLASS(1) (DILUTED)(2)
Israel Corporation Technologies (ICTech)
Ltd. ("ICTech") (3) (4) 15,143,064(5) 22.74 18.09
SanDisk Corporation(4) 9,419,724(6) 14.26 11.25
Alliance Semiconductor Corporation (4) 9,266,137(7) 14.03 11.07
Macronix International Co. Ltd.(4) 9,070,395(8) 13.74 10.83
Ontario Teachers' Pension Plan Board
("OTPP") 4,350,000(9) 6.49 5.20
(1) Assumes the holder's beneficial ownership of all Ordinary Shares that
the holder has a right to purchase within 60 days.
(2) Assumes that all currently outstanding rights to purchase Ordinary
Shares have been exercised by all holders.
(3) On January 31, 2001, Israel Corp. transferred all its beneficial
ownership of shares of Tower to ICTech.
(4) Pursuant to a shareholders agreement among Israel Corp., Alliance
Semiconductor Corporation, SanDisk Corporation and Macronix Co. Ltd.,
each of ICTech, Alliance Semiconductor Corporation, SanDisk
Corporation and Macronix Co. Ltd. may be said to have shared voting
and dispositive control over 63.46% of the outstanding shares of
Tower.
(5) Based on information provided by ICTech, represents 14,260,504 shares
currently owned by ICTech, and 882,560 shares issuable upon the
exercise of currently exercisable warrants.
(6) Based on information provided by SanDisk, represents 9,059,412 shares
currently owned by SanDisk, and 360,312 shares issuable upon the
exercise of currently exercisable warrants.
(7) Based upon information provided by Alliance, represents 8,908,390
shares currently owned by Alliance, and 357,747 shares issuable upon
the exercise of currently exercisable warrants.
3
(8) Based on information provided by Macronix, represents 8,773,395 shares
currently owned by Macronix, and 297,000 shares issuable upon the
exercise of currently exercisable warrants.
(9) Based on information provided by OTPP, represents 3,000,000 shares
currently owned by OTPP and 1,350,000 shares issuable upon the
exercise of currently exercisable warrants issued pursuant to a Share
Purchase Agreement dated July 23, 2002.
MATTERS RELATING TO THE ANNUAL AND SPECIAL GENERAL MEETING
At the Meeting, the shareholders will be asked to vote on the following
proposals:
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Board of Directors is comprised of eight members, six of whom are
elected to the Board of Directors until our next annual meeting, and two of whom
are Outside and Independent Directors who are appointed by our shareholders for
fixed terms. The Board of Directors has nominated the six current directors
named below for election at the Meeting to serve as directors until the next
annual meeting or until their respective successors are duly elected and have
qualified.
If a properly executed proxy does not give specific instructions with
respect to the election of directors, the persons named as proxies therein will
vote the Ordinary Shares covered thereby FOR the election of all nominees. If
any of such nominees is unable to serve (which event is not anticipated), the
persons named in the proxy will vote the Ordinary Shares for the election of
such other nominees as the Board of Directors may propose.
Set forth below are the names of, and certain other information concerning,
the nominees for election as directors at the Meeting:
CARMEL VERNIA, age 51, has served as Chairman of the Board and CEO since
June 1, 2003. From 2000 to 2002, Mr. Vernia served as Chief Scientist in the
Government of Israel's Ministry of Industry and Trade. In that position, he was
responsible for setting the government's research and development policy and
managing a budget dedicated to the growth of Israel's high-tech industry.
Previous to that, he spent 16 years with Comverse Technology in various
positions, culminating with his appointment to the dual positions of chief
operating officer of Comverse and CEO of Comverse Infosys, a subsidiary of
Comverse that has since become Verint Systems. Mr. Vernia earned a master's
degree in electrical and computer engineering from the University of California,
Davis, and a bachelor's degree in electrical engineering from the Technion -
Israel Institute of Technology.
IDAN OFER, age 49, has served as a director since June 1999 and served as
Chairman of the Board from January 2000 through May 2003. Mr. Ofer serves on the
Stock Option and Compensation Committee. Mr. Ofer has served as Chairman of the
Board of Directors of Israel Corp., which wholly owns one of our current
principal shareholders, since April 1999. Mr. Ofer also serves as a director of
several public company subsidiaries of Israel Corp. In addition to his positions
within Israel Corp., Mr. Ofer currently serves as a director of several
companies engaged in venture capital and energy projects.
4
EHUD HILLMAN, age 51, served as a director from October 1996 through August
1999 and was reappointed to the Board in January 2000. In January 2001, Mr.
Hillman was appointed as the Vice Chairman of the Board. Mr. Hillman serves on
the Tender Committee. Since February 2004 Mr. Hillman has served as a member of
the Board of Directors of ZIM Israel Navigation Company and since March 2001,
Mr. Hillman has served as President and Chief Executive Officer of ICTech, the
holding company of Israel Corp. that is one of our current principal
shareholders. Mr. Hillman served as Chief Financial Officer of Israel Corp. from
September 1996 to 1997 and as Executive Vice President and Chief Financial
Officer of Israel Corp. from May 1997 to 2001. Mr. Hillman served as a director
of several subsidiaries of Israel Corp., including Israel Chemicals Ltd., ZIM
Israel Navigation Company and others. Prior thereto, Mr. Hillman was Vice
President and Controller of Clal Industries Ltd. and a director of several
companies in the Clal Group.
DR. ELI HARARI, age 59, has served as a director since January 2001. Dr.
Harari serves on the Stock Option and Compensation Committee. Dr. Harari, the
founder of SanDisk Corporation, has served as President and Chief Executive
Officer and as a director of SanDisk since 1988. In 1983, Dr. Harari founded
Wafer Scale Integration (WSI), a semiconductor company acquired by ST
Microlectronics in 2000, serving as WSI's President and Chief Executive Officer
from 1983 to 1986 and as Chairman and Chief Technical Officer from 1986 to 1988.
MIIN WU, age 55, has served as a director since January 2001. Mr. Wu
currently serves as President, Chief Executive Officer and an Executive Director
of Macronix International and has been an executive officer of Macronix since
its formation in 1989. Mr. Wu received both a B.S. and an M.S. in Electrical
Engineering from National Cheng-Kung University in Taiwan as well as an M.S. in
Material Science & Engineering from Stanford University.
N. DAMODARY REDDY, age 66, has served as a director since January 2001. Mr.
Reddy serves on the Audit Committee. Mr. Reddy is the co-founder of Alliance
Semiconductor Corporation and has served as its Chairman of the Board, Chief
Executive Officer and President from its inception in February 1985. Mr. Reddy
also served as the Chief Financial Officer of Alliance Semiconductor from June
1998 until January 1999 and from May 2001 until April 2002. From September 1983
to February 1985, Mr. Reddy served as President and Chief Executive Officer of
Modular Semiconductor, Inc., and from 1980 to 1983, he served as manager of
Advanced CMOS Technology Development at Synertek, Inc., a subsidiary of
Honeywell, Inc. Prior to that time, Mr. Reddy held various research and
development and management positions at Four Phase Systems, a subsidiary of
Motorola, Inc., Fairchild Semiconductor and RCA Technology Center. Mr. Reddy
holds an MS degree in Electrical Engineering from North Dakota State University
and an MBA from Santa Clara University.
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED THAT MR. CARMEL VERNIA, MR. IDAN OFER, MR. EHUD HILLMAN, DR. ELI
HARARI, MR. MIIN WU AND MR. N.D. REDDY ARE HEREBY ELECTED TO SERVE AS
MEMBERS OF THE BOARD OF DIRECTORS OF THE COMPANY UNTIL THE NEXT ANNUAL
MEETING OF SHAREHOLDERS OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY
ELECTED AND QUALIFIED."
The election of the director nominees requires the affirmative vote of
shareholders present in person or by proxy and holding Ordinary Shares amounting
in the aggregate to at least a majority of the votes actually cast with respect
to such proposal.
5
PROPOSAL NO. 2
PROPOSAL TO APPOINT A CHAIRMAN OF THE BOARD OF DIRECTORS
Pursuant to a provision of our Articles of Association, our shareholders
are to appoint a member of the Board of Directors to serve as its Chairman. In
May 2003, our shareholders approved the appointment of Mr. Carmel Vernia as both
the Chairman of our Board of Directors, in addition to his service as our chief
executive officer, effective June 1, 2003. The Board of Directors has nominated
Mr. Vernia, who remains our chief executive officer, to continue to also serve
as the Chairman of our Board of Directors until the next annual meeting of the
shareholders, and believes that such appointment is appropriate and in the best
interests of the Company and its shareholders.
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED THAT THE REAPPOINTMENT OF MR. CARMEL VERNIA AS THE CHAIRMAN OF
THE BOARD OF DIRECTORS TO SERVE UNTIL THE NEXT ANNUAL MEETING OF THE
SHAREHOLDERS OR UNTIL HIS SUCCESSOR SHALL BE DULY APPOINTED AND QUALIFIED
IS HEREBY APPROVED."
The reappointment of Mr. Carmel Vernia as the Chairman of the Board of
Directors requires the affirmative vote of shareholders present in person or by
proxy and holding Ordinary Shares amounting in the aggregate to at least a
majority of the votes actually cast with respect to such proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
REAPPOINTMENT OF MR. CARMEL VERNIA AS THE CHAIRMAN OF THE BOARD OF DIRECTORS TO
SERVE UNTIL THE NEXT ANNUAL MEETING.
PROPOSAL NO. 3
PROPOSAL TO APPROVE THE APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANT
The Audit Committee of the Board of Directors has authorized the
appointment of the accounting firm of Brightman Almagor & Co. (a member of
Deloitte Touche Tohmatsu International) to serve as our independent public
accountant for the year ending December 31, 2004 and for the period commencing
January 1, 2005 and until the next annual shareholders meeting. The Audit
Committee of our Board of Directors believes that such appointment is
appropriate and in the best interests of the Company and its shareholders.
Subject to the authorization of our shareholders, the Audit Committee of the
Board of Directors shall fix the remuneration of Brightman Almagor & Co. in
accordance with the volume and nature of their services.
6
A representative of Brightman Almagor & Co. will be invited to be present
at the Meeting and will have an opportunity to make a statement, if so desired,
and to respond to appropriate questions. In addition, the fees paid to Brightman
Almagor & Co. for its year 2003 audit and non-audit services shall be reported
to our shareholders at the Meeting.
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED THAT THE APPOINTMENT OF BRIGHTMAN ALMAGOR & CO. (A MEMBER OF
DELOITTE TOUCHE TOHMATSU INTERNATIONAL) AS THE INDEPENDENT PUBLIC
ACCOUNTANT OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 2004 AND FOR THE
PERIOD COMMENCING JANUARY 1, 2005 AND UNTIL THE NEXT ANNUAL SHAREHOLDERS
MEETING, AND THE AUTHORIZATION OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS TO FIX THE REMUNERATION OF SUCH AUDITORS IN ACCORDANCE WITH THE
VOLUME AND NATURE OF THEIR SERVICES, IS HEREBY APPROVED."
The affirmative vote of the holders of a majority of the voting power of
the Company represented at the Meeting in person or by proxy and voting thereon
is necessary for approval of the appointment of Brightman Almagor & Co. as the
independent public accountant of the Company and the authorization of the Audit
Committee to fix such auditors' remuneration.
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" THE APPOINTMENT OF BRIGHTMAN ALMAGOR & CO. AS THE
INDEPENDENT PUBLIC ACCOUNTANT OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31,
2004 AND THE AUTHORIZATION OF THE AUDIT COMMITTEE TO FIX SUCH AUDITORS'
REMUNERATION.
PROPOSAL NO. 4
PROPOSAL TO EXTEND THE APPOINTMENT OF AN OUTSIDE AND
INDEPENDENT DIRECTOR TO AN ADDITIONAL THREE-YEAR TERM
The Israeli Companies Law requires Israeli companies with shares that have
been offered to the public in or outside of Israel to appoint two Outside and
Independent Directors. No person may be appointed as an Outside and Independent
Director if the person or the person's relative, partner, employer or any entity
under the person's control, has or had, on, or within the two years preceding,
the date of the person's appointment to serve as an Outside and Independent
Director, any affiliation with the company or any entity controlling, controlled
by or under common control with the company. The term "affiliation" includes an
employment relationship, a business or professional relationship maintained on a
regular basis; control of the company; and service as an office holder.
No person may serve as an Outside and Independent Director if the person's
position or other business activities create, or may create, a conflict of
interest with the person's responsibilities as an independent director or may
otherwise interfere with the person's ability to serve as an Outside and
Independent Director.
7
The initial term of an Outside and Independent Director is three years and
may be extended for one additional three-year period. Outside and Independent
Directors may be removed only by the same percentage of shareholders as is
required for their election, or by a court, and then only if the Outside and
Independent Directors cease to meet the statutory qualifications for their
appointment or if they violate their duty of loyalty to the company. In general,
each committee of a company's board of directors must include at least one
Outside and Independent Director and all Outside and Independent Directors must
be members of the company's audit committee.
Mr. Hans Rohrer was appointed as an Outside and Independent Director in
April 2002 for a three-year term that expires in April 2005; certain information
concerning Mr. Rohrer is set forth below:
HANS ROHRER, age 54, has been a director and member of the Audit Committee
since April 2002. Since May 2002, Mr. Rohrer serves as President and Chief
Executive Officer of Acuid Corporation. From 1999 to 2002, Mr. Rohrer served as
President of Taiwan Semiconductor Manufacturing Company-Europe (TSMC-Europe).
Mr. Rohrer has held various engineering, marketing, sales and general management
positions, including Vice President and General Manager, Europe, with National
Semiconductor between 1980 and 1998. Mr. Rohrer started his career in the
semiconductor industry with Texas Instruments.
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED TO ELECT MR. HANS ROHRER TO AN ADDITIONAL THREE-YEAR TERM AS AN
OUTSIDE AND INDEPENDENT DIRECTOR COMMENCING APRIL 21, 2005 AND TO SERVE
UNTIL THE END OF SUCH TERM OR UNTIL HIS RESPECTIVE SUCCESSOR IS DULY
ELECTED AND SHALL QUALIFY."
The election of Mr. Hans Rohrer as an Outside and Independent Director of
the Company requires approval by (i) the majority of votes cast at the Meeting,
including at least one third of all votes of the non-controlling shareholders
who are present in person or by proxy and vote on the Proposal or (ii) the
majority of votes cast on the Proposal at the Meeting, provided that the total
votes cast in opposition to the Proposal by the non-controlling shareholders
does not exceed 1% of all the voting rights in the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
APPOINTMENT OF MR. HANS ROHRER AS AN OUTSIDE AND INDEPENDENT DIRECTOR FOR AN
ADDITIONAL THREE-YEAR TERM.
8
PROPOSAL NO. 5
PROPOSAL TO APPOINT AN OUTSIDE AND INDEPENDENT DIRECTOR TO THE
BOARD OF DIRECTORS OF THE COMPANY FOR A THREE-YEAR TERM
The Company's Board of Directors has nominated Ms. Tal Yaron-Eldar for
election as an Outside and Independent Director to fill the vacancy created by
the expiration of the term of Ms. Zahava Simon to serve for a period of three
years and until her respective successor is duly elected and shall qualify. Set
forth below is certain information concerning Ms. Tal Yaron-Eldar:
TAL YARON-ELDAR, age 41, served as Israel's Income Tax and Property
Commissioner from 2002 to 2004. Between 1998 and 2001, Ms. Yaron-Eldar served as
the Chief Legal Advisor to the Customs and V.A.T. Department of the Israel Tax
Authority. During the preceding ten years, Ms. Yaron-Eldar served in various
positions with Israel's Income Tax and Real Property Tax Commission, including
Senior Head of its legal department and Deputy Chief Legal Advisor. Ms.
Yaron-Eldar holds a master's degree in business and a bachelor's degree in law
from Tel-Aviv University and is a member of the Israeli Bar Association.
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED TO ELECT MS. TAL YARON-ELDAR AS AN OUTSIDE AND INDEPENDENT
DIRECTOR OF THE COMPANY FOR A THREE-YEAR TERM COMMENCING JANUARY 1, 2005
AND UNTIL HER RESPECTIVE SUCCESSOR IS DULY ELECTED AND SHALL QUALIFY."
The election of Ms. Tal Yaron-Eldar as an Outside and Independent Director
of the Company requires approval by (i) the majority of votes cast at the
Meeting, including at least one third of all votes of the non-controlling
shareholders who are present in person or by proxy and vote on the proposal or
(ii) the majority of votes cast on the proposal at the Meeting, provided that
the total votes cast in opposition to the proposal by the non-controlling
shareholders does not exceed 1% of all the voting rights in the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
APPOINTMENT OF MS. TAL YARON-ELDAR AS AN OUTSIDE AND INDEPENDENT DIRECTOR FOR A
THREE-YEAR TERM.
PROPOSAL NO. 6
PROPOSAL TO INCREASE THE NUMBER OF THE
COMPANY'S AUTHORIZED ORDINARY SHARES
To ensure the availability of a sufficient number of authorized shares for
issuance in connection with the anticipated raising of additional capital for
the Fab 2 project, the Board of Directors of the Company has approved the
increase its authorized share capital from 150,000,000 shares, NIS 1.00 per
share, to 250,000,000, NIS 1.00 per share.
9
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED TO INCREASE THE NUMBER OF THE COMPANY'S AUTHORIZED ORDINARY
SHARES TO 250,000,000 AND AUTHORIZED SHARE CAPITAL TO NIS 250,000,000 AND
TO AMEND THE COMPANY'S ARTICLES OF ASSOCIATION TO REFLECT SUCH INCREASE."
The affirmative vote of the holders of a majority of the voting power of
the Company represented at the Meeting in person or by proxy and voting thereon
is necessary for approval of Proposal 6 approving an increase in the Company's
authorized share capital.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF AN INCREASE IN THE COMPANY'S AUTHORIZED ORDINARY SHARES TO
250,000,000 AND AUTHORIZED SHARE CAPITAL TO NIS 250,000,000.
PROPOSAL NO. 7
PROPOSAL TO MODIFY THE COMPANY'S NON-EMPLOYEE
DIRECTOR SHARE OPTION PLAN 2001
In light of the Board of Directors belief that options to purchase shares
of the Company can and should be an important component of director
compensation, the Board of Directors recommended in 2001 that the shareholders
approve the Non-Employee Director Share Option Plan 2001 (the "2001 Plan"). In
August 2001, the shareholders of the Company approved the 2001 Plan. The 2001
Plan provides for the grant of options to each eligible director to purchase up
to 40,000 Ordinary Shares, and an aggregate of up to 400,000 Ordinary Shares of
the Company. All directors of the Company, other than directors who are employed
as officers of the Company, are eligible to receive options under the 2001 Plan.
As of October 31, 2004, 270,000 options that were granted under the 2001 Plan
may be exercised.
Pursuant to the original terms of the 2001 Plan, options granted under the
2001 Plan may be exercised for a period of five years from the later of the date
the options first became exercisable or the termination of the lock-up period
which may be required by the Israeli tax authorities. Pursuant to such original
terms, upon termination of an eligible director's service as a director, other
than by reason of the eligible director's death or disability, all unvested
options immediately expire and all vested options as of the date of termination
expire 90 days thereafter.
On September 21, 2004, the Board of Directors resolved to approve the
extension of the exercise period for options granted under the 2001 Plan to a
period of up to ten years from the earlier of the date the options were granted
or the termination of the lock-up period which may be required by the Israeli
tax authorities. The Board of Directors also approved the modification of the
terms of all options granted under the 2001 Plan to provide that all vested
options as of the date of termination of an eligible director's service as a
director will expire three years after the date of termination, other than by
reason of the eligible director's death or disability.
10
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED TO APPROVE THE AMENDMENT OF THE NON-EMPLOYEE DIRECTOR SHARE
OPTION PLAN 2001 SUCH THAT OPTIONS WHICH VEST UNDER THE PLAN SHALL EXPIRE AT THE
EARLIER OF (I) 10 YEARS FROM THE DATE OF THE GRANT OR (II) THREE YEARS AFTER THE
TERMINATION OF SERVICE."
This Proposal 7 may be subject to special approval provisions of the
Companies Law which require that the proposal be approved by (i) the majority of
the votes cast at the Meeting including at least one-third of the voting power
of the disinterested shareholders who are present in person or by proxy and vote
on the proposal, or (ii) the majority of the votes cast on the proposal at the
Meeting, provided that the total votes cast in opposition to the proposal by the
disinterested shareholders does not exceed 1% of all the voting power in the
Company.
EACH SHAREHOLDER VOTING AT THE MEETING OR PRIOR THERETO BY MEANS OF THE
ACCOMPANYING PROXY CARD IS REQUESTED TO NOTIFY US IF HE OR SHE HAS A PERSONAL
INTEREST IN CONNECTION WITH THIS PROPOSAL 7 AS A CONDITION FOR HIS OR HER VOTE
TO BE COUNTED WITH RESPECT TO THIS PROPOSAL 7. IF ANY SHAREHOLDER CASTING A VOTE
IN CONNECTION HERETO DOES NOT NOTIFY US IF HE OR SHE HAS A PERSONAL INTEREST
WITH RESPECT TO THIS PROPOSAL 7, HIS OR HER VOTE WITH RESPECT TO THIS PROPOSAL 7
WILL BE DISQUALIFIED. FOR THIS PURPOSE, "PERSONAL INTEREST" IS DEFINED AS: (1) A
SHAREHOLDER'S PERSONAL INTEREST IN THE APPROVAL OF AN ACT OR A TRANSACTION OF
THE COMPANY, INCLUDING (I) THE PERSONAL INTEREST OF HIS OR HER RELATIVE (WHICH
INCLUDES FOR THESE PURPOSES ANY MEMBERS OF HIS/HER IMMEDIATE FAMILY OR THE
SPOUSES OF ANY SUCH MEMBERS OF HIS OR HER IMMEDIATE FAMILY); AND (II) A PERSONAL
INTEREST OF A BODY CORPORATE IN WHICH A SHAREHOLDER OR ANY OF HIS/HER
AFOREMENTIONED RELATIVES SERVES AS A DIRECTOR OR THE CHIEF EXECUTIVE OFFICER,
OWNS AT LEAST 5% OF ITS ISSUED SHARE CAPITAL OR ITS VOTING RIGHTS OR HAS THE
RIGHT TO APPOINT A DIRECTOR OR CHIEF EXECUTIVE OFFICER, BUT (2) EXCLUDING A
PERSONAL INTEREST ARISING SOLELY FROM THE FACT OF HOLDING SHARES IN THE COMPANY
OR IN A BODY CORPORATE.
PROPOSAL NO. 8
PROPOSAL TO APPROVE 210,000 OPTIONS UNDER THE 2005
EMPLOYEE SHARE OPTION PLAN TO BE GRANTED AS ISO OPTIONS
In 2000, our Board of Directors and shareholders approved our 2000/2
Employee Share Option Plan (the "2000 Plan"). The 2000 Plan included an
"evergreen" provision which provided that if the maximum number of our unvested
options and the maximum number of our undistributed options are both no more
than 12% of our outstanding shares, the option pool available for grants under
the plan will be increased by 3.6% of our outstanding share capital at the
beginning of each of 2001, 2002, 2003, 2004 and 2005. For administrative ease,
annual increases to the option pool available pursuant to the 2000 Plan are
allocated to and granted under separate plans each year. Accordingly, we have
established a 2005 Employee Share Option Plan (the "2005 Plan"). The 2005 Plan
was approved by our shareholders in 2004. Options granted under the 2005 Plan
may be granted under Section 102 of the Israeli Income Tax Ordinance, as
Incentive Stock Options ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986 (the "Code") or as Non-qualified Stock Options
under the Code.
11
Under the Plan as originally adopted the number of options that may be
granted as ISO's was not specified. Under recently adopted regulations, in order
to qualify for ISO treatment, the 2005 Plan must specify the maximum number that
may be granted as ISO's under the 2005 Plan. The Board of Directors has amended
the 2005 Plan to provide that the total number of ISO Options that may be
granted is 210,000.
The shareholders of the Company will be requested to adopt the following
resolution at the Meeting:
"RESOLVED THAT THE AMENDMENT TO THE 2005 EMPLOYEE SHARE OPTION PLAN TO
ALLOW THE GRANT OF UP TO 210,000 OPTIONS AS INCENTIVE STOCK OPTIONS IS
HEREBY APPROVED."
The approval of the amendment of the 2005 Employee Share Option Plan to
specify the number which may be granted as ISO Stock Options requires the
affirmative vote of shareholders present in person or by proxy and holding
Ordinary Shares amounting in the aggregate to at least a majority of the votes
actually cast with respect to such proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE 2005 EMPLOYEE SHARE OPTION PLAN TO SPECIFY THE
NUMBER WHICH MAY BE GRANTED AS ISO STOCK OPTIONS.
REVIEW OF THE COMPANY'S BALANCE SHEET AS OF DECEMBER 31, 2003
AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR THEN ENDED
At the Meeting, shareholders will have an opportunity to review, ask
questions and comment on the Company's Consolidated Balance Sheet as of December
31, 2003 and the Consolidated Statement of Income for the year then ended.
ADDITIONAL INFORMATION
FOREIGN PRIVATE ISSUER. We are subject to the informational requirements of
the United States Securities Exchange Act of 1934 (the "Exchange Act"), as
amended, as applicable to foreign private issuers. Accordingly, we file reports
and other information with the SEC. Shareholders may read and copy any document
that we file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 U.S.A. Shareholders can call the SEC at 1-800-SEC-0330
for further information on using the public reference room. In addition, similar
information concerning us can be inspected and copied at the offices of the
National Association of Securities Dealers, Inc., 9513 Key West Avenue,
Rockville, Maryland 20850 USA, and the offices of the Israel Securities
Authority at 22 Kanfei Nesharim Street, Jerusalem Israel, and the offices of the
Tel Aviv Stock Exchange at 54 Ahad Ha'am Street, Tel Aviv Israel. All documents
which we file on the SEC's EDGAR system are available for retrieval on the SEC's
website at www.sec.gov. All documents which we file on the Israel Securities
Authority's MAGNA system are available for retrieval on its website at
https://magna.isa.gov.il.
12
As a "foreign private issuer", we are exempt from the rules under the
Exchange Act prescribing certain disclosure and procedural requirements for
proxy solicitations. Also, our officers, directors and principal shareholders
are exempt from the reporting and "short-swing" profit recovery provisions
contained in Section 16 of the Exchange Act and the rules thereunder, with
respect to their purchases and sales of securities. In addition, we are not
required under the Exchange Act to file periodic reports and financial
statements with the SEC as frequently or as promptly as United States companies
whose securities are registered under the Exchange Act.
ISA EXEMPTION. With the exception of the reporting obligations applicable
to a company organized under the laws of the State of Israel whose shares are
traded on approved securities exchanges outside of Israel and in Israel as
specified in Chapter Five (iii) of the Israeli Securities Law, 1968 (the
"Israeli Securities Law"), we have received from the Securities Authority of the
State of Israel an exemption from the reporting obligations as specified in
Chapter Six of the Israeli Securities Law. We must, however, make available for
public review at our offices in Israel a copy of each report that is filed in
accordance with applicable U.S. law. These documents are available for
inspection at our offices at Hamada Avenue, Ramat Gavriel Industrial Park,
Migdal Haemek, Israel.
By Order of the Board of Directors,
CARMEL VERNIA
Chairman of the Board and CEO
Migdal Haemek, Israel
November 10, 2004
13
EXHIBIT 99.2
ANNUAL AND SPECIAL GENERAL MEETING OF SHAREHOLDERS OF
TOWER SEMICONDUCTOR LTD.
DECEMBER 5, 2004
PLEASE SIGN, DATE AND MAIL
YOUR PROXY CARD IN THE
ENVELOPE PROVIDED AS SOON
AS POSSIBLE.
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 2-6 AND "FOR" PROPOSAL 8.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
FOR AGAINST ABSTAIN
1. Election of Directors: TO ELECT Mr. Carmel Vernia, Mr. Idan Ofer, 2. TO APPROVE the reappointment of Mr.
Mr. Ehud Hillman, Dr. Eli Harari, Mr. Miin Wu and Mr. N.D. Reddy Carmel Vernia as Chairman of the Board
as members of the Board of Directors of the Company. of Directors of the Company.
[_] [_] [_]
NOMINEES: 3. TO APPROVE the appointment of Brightman
[_] FOR ALL NOMINEES [_] Mr. Carmel Vernia Almagor & Co. as the independent public
[_] Mr. Idan Ofer accountant of the Company for the year
[_] WITHHOLD AUTHORITY [_] Mr. Ehud Hillman ending December 31, 2004 and for the period
FOR ALL NOMINEES [_] Dr. Eli Harari commencing January 1, 2005 and until the
[_] Mr. Min Wu next annual shareholders meeting, and to
[_] FOR ALL EXCEPT [_] Mr. N.D. Reddy authorize of the Audit Committee of the
(see instructions below) Board to fix the remuneration of such
auditors.
[_] [_] [_]
4. TO ELECT Mr. Hans Rohrer to an
additional three-year term as an Outside
and Independent Director, commencing April
21, 2005.
INSTRUCTION: To withhold authority to vote for any individual [_] [_] [_]
nominee(s), mark "FOR ALL EXCEPT" and fill in the circle next to each
nominee you wish to withhold, as shown here: o 5. TO ELECT Ms. Tal Yaron-Eldar as an
Outside and Independent Director of the
Company for a three-year term commencing
January 1, 2005.
[_] [_] [_]
6. TO INCREASE the number of the Company's
authorized ordinary shares to 250,000,000
and authorized share capital to NIS
250,000,000 and to amend the Company's
Articles of Association to reflect such
increase.
[_] [_] [_]
For the purposes of this Proxy Card, a "Personal Interest" of a Indicate a vote with respect to 7A or 7B according to
shareholder in the approval of an act or a transaction of the Company, whether or not you have a Personal Interest in Proposal
(i) includes the personal interest of any members of his/her immediate 7. Your vote will not be counted if you fail to vote
family (including the spouses thereof), or a personal interest of a or if you vote in both 7A and 7B.
body corporate in which the shareholder or such family member thereof
serves as a director or the chief executive officer, owns at least 5% of 7A. VOTE HERE if you DO NOT have a Personal
its issued share capital or its voting rights or has the right to Interest (as defined) in Proposal 7. TO
appoint a director or chief executive officer, and (ii) excludes a APPROVE the amendment of the Non-Employee
personal interest that arises solely from the fact of holding shares in Director Share Option Plan 2001.
the Company or any body corporate.
[_] [_] [_]
7B. VOTE HERE if you have a Personal Interest
(as defined) in Proposal 7. TO APPROVE the
amendment of the Non-Employee Director
Share Option Plan 2001.
[_] [_] [_]
8. TO APPROVE the amendment to the 2005
Employee Share Option Plan.
[_] [_] [_]
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted
via this method.
[_]
Signature of Shareholder: ______________ Date:_________ Signature of Shareholder: ______________ Date:_________
NOTE: Please sign exactly as the name or names appear on this proxy. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
TOWER SEMICONDUCTOR LTD.
FOR THE ANNUAL AND SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON SUNDAY, DECEMBER 5, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Tower Semiconductor Ltd. (the "Company") hereby
appoints each of Oren Shirazi and Tamar Cohen of the Company, each with full
power of substitution, the true and lawful attorney, agent and proxy of the
undersigned, to vote, as designated on the reverse side, all of the Ordinary
Shares of the Company which the undersigned is entitled in any capacity to vote
at the Annual and Special General Meeting of Shareholders of the Company to be
held at the offices of the Company located at Hamada Avenue, Ramat Gavriel
Industrial Park, Migdal Haemek, Israel, on Sunday, December 5, 2004 at 11:00
a.m. (local time) and all adjournments and postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of an Annual and
Special General Meeting and the Proxy Statement accompanying such Notice,
revokes any proxy or proxies heretofore given to vote upon or act with respect
to the undersigned's shares and hereby ratifies and confirm all that the proxies
or their substitutes may lawfully do by virtue hereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IN ORDER FOR YOUR VOTE TO BE
COUNTED WITH RESPECT TO PROPOSAL 7 , YOU MUST INDICATE WHETHER YOU HAVE A
PERSONAL INTEREST IN SUCH PROPOSAL BY VOTING IN EITHER ITEM 7A OR 7B. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5, 6 AND
8.
Beneficial owners who hold their shares through members of the Tel Aviv Stock
Exchange ("TASE") may either vote their shares in person at the meeting by
presenting a certificate signed by a member of the TASE which complies with the
Israel Companies Regulations (Proof of Ownership for Voting in General
Meetings)--2000 as proof of ownership of the shares, or send such certificate
along with a duly executed proxy to the Company at Hamada Avenue, Ramat Gavriel
Industrial Park, Post Office Box 619, Migdal Haemek 23105, Israel, Attention:
Corporate Secretary.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
